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Mitchell’s laws: ● The more federal budgets are cut and taxes increased, the weaker an economy becomes. ● Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder. ● Until the 99% understand the need for federal deficits, the upper 1% will rule. ● To survive long term, a monetarily non-sovereign government must have a positive balance of payments. ● Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics. ● The penalty for ignorance is slavery. ● Everything in economics devolves to motivation.

Follow up:

Quantitative easing (QE) is economics jargon for a process few non-economists understand. That, after all, is the purpose of jargon. Sadly, few economists understand it either.

To paraphrase from Wikipedia:

Quantitative Easing (QE) is used by central banks to stimulate the national economy. A central bank implements QE by buying long term bonds from commercial banks and other private institutions, thus creating money and injecting a pre-determined quantity of money into the economy.

Quantitative easing increases the excess reserves of the banks, and raises the prices of the financial assets bought, which lowers their yield.

Risks include the policy being more effective than intended in acting against deflation – leading to higher inflation, or of not being effective enough if banks do not lend out the additional reserves.

Utter nonsense on all counts.

Fed Chairman Bernanke, being among the nation’s experts in the effects of federal finances, is well aware of the following:

1. QE does not stimulate the economy. It depresses the economy. When the Fed buys T-bonds, it takes those T-bonds out of private hands, thereby reducing the amount of federal interest paid to the private sector.

Rather than being stimulative, these money supply reductions depress the economy.

2. Banks neither need nor use additional reserves. They can obtain all the reserves they want, directly from the Fed, at near zero rates. So adding to reserves does not stimulate lending.

3. Reductions in interest rates are not stimulative. In the blog post Low interest rates do not help the economy at there is no historical relationship between low interest rates and economic growth. In fact, the opposite is true. Higher rates force the federal government to pump more interest into the economy, which is stimulative.

So why does Chairman Bernanke, knowing the above, institute repeated rounds of QE, and pretend he is doing this to help grow the economy, when he really is depressing the economy? Because it’s what his bosses (the President and Congress) want.

And why do the President and Congress want QE? Because recessing the economy widens the income gap between the rich and the rest.

And why do the President and Congress want the income gap to be widened? Because that is what the uber-rich bribe them to want (via political contributions and promises of lucrative employment, later). The world’s Pete Petersons and Koch brothers et al, want the gap widened, because it is the gap, not absolute income, that makes them rich and powertful.

If there were no gap, no one would be rich, and the wider the gap, the richer they are and the more power they have over you and me.

So they are quite pleased with Bernanke and the Fed, not only for depressing the economy, but also for brainwashing the voting public into believing this actually stimulates the economy.

It’s the perfect con. Get the victim to demand his own losses. Bernie Madoff knew this well, when he tricked people into demanding they be allowed to invest with him.

So you demand “deficit” reduction, “debt” reduction and QE, all in the name of economic stimulus, when in fact, all three are economically depressive.

The uber-rich reward the Fed and the politicians for using jargon to trick the public into believing that the treatment for anemia is to apply leeches. Owning the compliant media completes the con.

And the rich have succeeded. You believe what you’ve been told, don’t you?

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